Google says it has "taken action" and no longer trusts links from a major UK newspaper group – apparently referring to the Daily Express website.
In April, an Express Group email was made public offering links in online "SEO editorials" from £1,000 – with the aim of improving search engine rankings.
Such paid links are against Google's "terms of service" – and the Express (and OK) site initially suffered a page rank penalty in Google's toolbar (ie not much of a punishment at all).
But Google has now gone further, according to an interview with Google's search quality team at Digital Inspiration.
The only incident I know of recently in the UK is the Express case – so Matt Cutts appears to be saying the Express site (and presumably OK site) are no longer trusted.
Whatever your views on outing SEO tactics, this would be a fairly severe penalty for not using nofollow on paid links if carried forward.